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In a twist, The Wall Street Journal reported Monday that Thompson had told the board last week that he has thyroid cancer. The diagnosis contributed to his decision to step down, according to the newspaper’s unidentified sources.
The flap over the misleading bio elevated the angst in Yahoo just a month after Thompson laid off 2,000 employees, or 14 percent of the workforce, in the biggest payroll purge in the company’s history. In recent weeks, Thompson had been drawing up plans to close or sell about 50 of Yahoo’s services while also antagonizing much of Silicon Valley with a lawsuit alleging the rapidly growing social network Facebook stole some of its technology from Yahoo.
"In spite of the very bumpy road we’ve traveled, we are achieving genuine and meaningful successes in the marketplace every day and heading in the right direction," Levinsohn wrote in his Sunday memo.
Stifel Nicolaus analyst Jordan Rohan thinks Levinsohn’s media background may make him better qualified to be Yahoo’s CEO than Thompson, whose experience is rooted in electronic commerce.
"Ross Levinsohn is common-sense executive, a pragmatic operator who people love to work for," Rohan said. "He is the right guy for this job."
Thompson’s inaccurate resume might have been more forgivable at a company that was posting big returns for its shareholders, said James Post, a management professor at Boston University.
Yahoo’s stock has been sagging since it squandered an opportunity to sell itself to Microsoft Corp. in May 2008 for $33 per share, or $47.5 billion. Yahoo’s stock hasn’t traded above $20 since September 2008.
The shares climbed 31 cents Monday to close at $15.50, leaving Yahoo with a market value of $19 billion. That’s roughly the same as the individual fortunes of Google co-founders Larry Page and Sergey Brin, whose company was still smaller than Yahoo when it went public in 2004.
Facebook founder Mark Zuckerbeg’s wealth could surpass Yahoo’s market value depending on the price set in an initial public offering of stock that is expected to be set Thursday.
Yahoo’s struggles center on the company’s inability to keep up with Google and Facebook in the race for online advertising. Yahoo’s annual revenue has fallen from a peak of $7.2 billion in 2008 to $5 billion last year. Over the same period, Google’s annual revenue has climbed from $22 billion in 2008 to $38 billion last year. Facebook’s annual revenue has increased from $272 million in 2008 to $3.7 billion last year.
"Yahoo has been embattled for such a long time that there are a lot of people prepared to believe the worst about that company," said Post, who specializes in corporate governance and professional ethics. "When you’re angry at the management and the board, when nothing’s going right and you’re losing money, it’s understandable that shareholders would adopt an ‘off with their head’ attitude."
AP Business Writer Christina Rexrode in New York contributed to this story.
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